OPmobility SE (OPM) Earnings Call Transcript & Summary

Dear all, I'm very pleased as Chairman of the Board of Directors of Plastic Omnium to open this 2020 annual meeting of our 2020 results. Laurent Favre, CEO of Plastic Omnium, will present those results in details. Félicie Burelle, who has been in contact with a positive COVID-19 employee yesterday, applying the peer rules, is staying at home, but would be online. She's in good health, but we apply our policy to everybody in the group. So she won't be on the screen today. Adeline Mickeler, Director for Financial Communication, will be on the side of Laurent Favre. Just one preliminary word. 2020 has been very chaotic year, but it has been a fantastic opportunity for the new management team, Laurent Favre and Félicie Burelle to start develop, implement their new strategy and orientation for the future of Plastic Omnium. And I'm personally, and in name of the majority shareholder, very satisfied with their policy and work they have reached, as the successes have reached, which will bring more fruits and development in the years to come. So I pass on the word to Laurent Favre now.

[Foreign Language] Thank you, Mr. Burelle, and good morning from my side as well. Welcome to the 2020 Annual Result Presentation of Plastic Omnium. 2020 was, for sure, a unique year for the industry, for our company. A year are strongly impacting in the first semester by a huge drop of production volume, but also a year with a strong acceleration of the megatrends, transforming the industry seen some years like digitalization and electrification. Therefore, for us, for Plastic Omnium, it was about managing the crisis by protecting our employees by protecting our customers. It was about adapting very fast to the new normal, to the new situation, our cost structure, our capacities. It was also about accelerating the transformation of the group to become more efficient, more agile, about accelerating as well the innovation activities, for example, in hydrogen and also accelerating our activities in terms of sustainability. All these activities managed by the Plastic Omnium team make us even stronger after the crisis than before the crisis. And therefore, even if the market remains uncertain for 2021, we are very confident by starting this new year. And these other topics, we will present, Félicie Burelle, Adeline Mickeler and myself to you in the next 1 hour before coming to the Q&A session. Starting with the market development. You can see on the screen, well-known numbers, but I think it makes sense to spend some minutes to comment them. That is the production volume, the global industry production volume since 2007 with the development and the huge drop in volumes we have to face -- or we had to face in 2020, 17%, 15 million less cars produced compared to 2019. Therefore, much more than the crisis we had in 2008, 2009. Additionally, this huge drop in volumes is coming after already 2 years of dropping in volumes in the automotive industry after only 2 years of transformation. And that is the reason why we don't believe that the rebound will be as fast as expected by IHS, and you'll see the IHS numbers here on the screen. And we do anticipate the 2020 -- the 2019 production levels not before 2023 and probably not before 2024. That is the way we are managing the company, and that is the way as well we have adapted our cost structure, and we are continuing to adapt our cost structure. In this difficult market environment, we have been able to strengthen our fundamentals in 2020, starting with our teams. We did a fantastic job to adapt new ways of working, but also to accelerate in the transformation and innovation as well. With our customers as well, we are protecting them from the supply chain issues. But we have also accelerated with them many innovation activities. We have shown again that we can adapt very fast. Our operational performance was great in all of our facilities, and the way the agility we have shown to adapt our cost structure was remarkable. And at the end of the year, we have a very strong financial situation, which give us a lot of confidence for 2021. That in numbers, you can see the results we have achieved in the second semester of 2020. All the numbers are much better than the perspective we had given on July 23, but we had already upgraded on November 25. The operating margin is at 5.7% for the second semester, which is even higher than the second semester of 2019. The EBITDA is at 11.6%, and we have been able to generate more than EUR 600 million free cash flow in the second semester. These very good numbers, they do reflect from one side our capacity to adapt, to reduce our cost structure very fast to face the new normal and also the strong rebound of the market, especially in China and North America in the second half of 2020. For the complete year, it means economic sales being down by 14% like-for-like for a market being down by 17%, a positive operating margin of EUR 118 million, meaning 1.7% of our sales. A positive free cash flow for the year, which is a great performance and very strong liquidity because we finished 2020 with EUR 2.6 billion liquidity, which is EUR 200 million higher than 2019. 2020 was not about -- only about the crisis in terms of volume drop. It was also about the acceleration of megatrends impacting the automotive industry, the complete industry seen some years, starting with the electrification of the mobility, the electrification which is mainly driven by the regulation, which has been accelerated as well by all the recovery programs, all the grants announced by many countries, governments, region to support the recovery of the economy. Therefore, strong push on electrification. Electrification will develop differently depending on the region, depending on the infrastructure, depending on the customer needs. And therefore, we do anticipate a market becoming more regionalized, more fragmented in the future. Digitalization is part of our daily work now. It's also a huge opportunity to further improve our productivity to become more agile. Pressure on prices were already present before the crisis is increasing -- is increasing right now. We are making pressure on prices from our customers, which is normal because the volumes are basically down and the need for investment for innovation is even higher than before the crisis. And for sure, ESG expectations, sustainability expectation from all the stakeholders have also increased during the crisis. These are all the challenges the industry is facing, and these are all opportunities for Plastic Omnium to get even stronger and to reinforce our leadership in the coming years. To reinforce our leadership in the coming years, we do confirm a very aggressive strategy to continue to grow in this difficult environment. And our strategy is based on 3 pillars, the operational excellence, which is about being every day better, more agile and faster; innovation to increase the content by car and to grow with the content by car increase; and sustainability because it is the sense of the business we are doing and the strong expectation of all the stakeholders. In operational excellence, we have launched last year our Omega transformation plan. Félicie will talk about that later on. We have already great results. We are becoming more agile, more digital and even more to come. On innovation, we have made great progresses as well last year, especially in hydrogen with many announcements. We will come back to that later on. High ambition, but we have also launched a lot of programs dedicated to BEV platforms where Plastic Omnium has already a very strong position. And on sustainability, we have put in place a new governance. We have developed new KPIs, new actions that is already really part of our daily performance. Therefore, in all of the 3 pillars, strong activities in 2020 and a strong ambition for the years to come. I will now show you in 2020, why we believe -- why we are convinced that we are getting out of the crisis even stronger than before with concrete examples of some actions we have been working on in 2020. Starting with what was the first priority. It was about protecting our employees because we shouldn't forget that the COVID crisis is, first of all, a sanitary crisis. Protecting our employees by putting a very strict protocol in all of our factories, all of our sites, the same one for everybody, a strong protocol, which is still in place in most of our factories, except right now in China in some of the factories. But also by deciding to invest in our own production capacities to produce mask and to be independent as well, both in Europe and in North America. Second priority was -- sorry, if we continue with our teams, it's not only about the people of Plastic Omnium. It's also about the one suffering the most from the COVID situation, and therefore, we have decided last year to create a fund dedicated to the COVID-19 with EUR 1 million. And the fund, we have deployed with our Act For All, with our sustainability program in all of our factories, again, to support local initiatives. In total, more than 120 local initiatives have been supported for kids, for schools and so on. That is a way to show to the -- to all the stakeholders that we are taking care of them. That is also a great way to engage our people. Great success, and we will continue in 2021. Second priority was also to protect our customers because the supply chain was easily damaged by the COVID situation. We had to restart all the operation after some weeks of total breakdown with new sanitary measures in place with the right quality expectation also for our customers and also to manage the supply chain, which was and were still a challenge today. We have fulfilled all of our commitments. That means we have been always able to deliver our customers on time, which was very important for PO, and we are continuing to do that. With our customers as well, we had very important successes in terms of commercial awards. You can see on the slide some of the successes we had, which are representative from the potential we have already with our current product portfolio to continue to grow in the coming years. Tailgates in North America for GM and Ford, the first time that we do develop and we will produce tailgates in North America, showing that in this market segment, we have still a good potential for future growth. But also strong presence in BEV platforms, BEV, both for traditional OEMS, like the one you can see with General Motors in the U.S., but also with the newcomers or the pure BEV players like Tesla with additional activities with them in China, but also Rivian, both for the pickup and also for their vehicle they are producing for Amazon. On top of that, also many successes in hydrogen. You know that we are speeding up nitrogen as well like, for example, for buses, for trucks and for race cars. Our customers. It's also about what we do deliver to them on a daily base, and we are always very proud when we receive -- where we get quality awards, which was again the case last year, which demonstrates again that they are very satisfied with our daily performance. You can see here some examples in many different countries from different customers. And again, that is highlighting that operational excellence at PO is our daily work and is well recognized by our customers. We had to adapt to the market drop, I was mentioning before, and adapting to the market drop in 2020 was, first of all, adapting our cost structure. We have done a great job on that. We have been able to reduce our staff cost or labor cost. That means all labor by 12% last year, which is a saving of EUR 153 million. And additionally, we have reduced our production costs and SG&A by 10%, meaning EUR 87 million. That means in total, EUR 240 million savings achieved in 2020 compared to 2019. On top of that, we have engaged some restructuring action to adapt our footprint capacity to the new normal to what -- how we do expect the market to develop in the coming years with some planned closures we have announced, with some footprint optimization we are working on, like in Germany, for example, and so therefore, adapting our capacity is also part of our daily job. We have started again last year. We will continue. What we have done last year will bring us EUR 40 million additional savings by the end 2022. We will continue basically to flex, again, depending on how the market will develop. When we talk about operational excellence, we need to talk as well about our operation in South Carolina, where we have been suffering a lot in 2019 and where we have seen a great recovery in 2020. In 2020, we have been able to use the shutdown of our facilities in Greer and Anderson in April last year because of the COVID situation to anticipate some strong actions on the layout to improve the operation, to improve the KPIs, to improve the efficiency of the factories. That has been done in April, May last year. And all the KPIs, all the industrial KPIs, have improved massively in 2020. Therefore, our expectation for 2020 have been achieved. We are continuing the journey. The team, the local team is strongly engaged, and we do confirm for 2021, our ambition to achieve the breakeven. Additionally, we have been recognized by an additional customer in this region, General Motors, in South Carolina. We got a very important contract for us. It's a bumper and a tailgate. It will increase the workload in Anderson by the end of 2022. And it will contribute also to the margin improvement of our operation in South Carolina. And we expect to have additional good news in the coming weeks and months. By doing everything we have been doing before, and additionally, by cutting the investment by 27% compared to 2019 by also reducing the inventories, the overdues by EUR 80 million compared to 2019, we have been able to achieve a net debt being comparable to 2019 to strengthen our liquidity, which are higher than in 2019. And therefore, we finished the year of 2020 with a very strong financial structure, which is, for sure, very important with all the ambition we have and all the transformation of the market, which is accelerating. I will now hand over to Adeline Mickeler, and Adeline Mickeler will comment in -- with much more details our 2020 financial performance.

In 2020, we managed, first, an exceptional collapse of the automotive production, resulting in a drop of 30% of our sales on a like-for-like basis, so in H1, followed in H2 by a stronger-than-expected rebound of the market, leading to an increase of our sales, plus 2% like-for-like in H2. For the full year, our economic sales ended with a decrease of 14%. In that context, we were very quick and agile to flex and reduce our costs. So that we can limit the operational loss in H1 to EUR 116 million and to strongly benefit from the rebound in H2 with an operating margin of EUR 234 million, 5.7% of our sales, much better again than the 5% we guided for in November 2020. Our full year operating margin is, therefore, significantly positive, EUR 118 million, 1.7% of our sales. In H1 2020, taken into consideration the slow recovery on a midterm basis for the automotive production, we impaired EUR 255 million, leading to a net loss at group level of EUR 251 million. We were also very active in managing our cash and preserving our liquidity, as you can see here, with the same and comparable level of activity at year-end 2020 compared to 2019. Our overdues and inventories are reduced by EUR 82 million. In the same time, we also reduced our CapEx by EUR 138 million. This is a decrease of 27%. We reversed in H2 all the free cash flow, the negative free cash flow generation in H1, leading to a positive free cash flow of EUR 34 million for the full year. And in the same time, again, we preserved our liquidity, even increasing it by EUR 200 million to end at 2.6 billion liquidity at year-end, while reimbursing our bond of EUR 500 million in May 2020. Coming into the details of our sales. Economic sales amounted to EUR 7.7 billion in 2020, decreasing 14% on a like-for-like basis. This is a 3 points outperformance to the automotive production decreasing in the same time over the same period by 17%. Our consolidated sales showed an outperformance of 2 points, and our consolidated sales are without the percentage of JV we have in China and Turkey for PO Industries and in Korea for PO Modules. This nice outperformance is driven, as you can see, by PO Modules with 13 points outperformance. You see PO Industries performing in line with the market. Actually, PO Industries outperformed by around 3 points the automotive production in Europe and in Asia, including China, but the regional mix reduces this outperformance. Per region. Per region, our activity showed a strong resilience in 2020, starting with Europe, which is 33% of our sales. In Europe, we outperformed the automotive production by 8.3 points. This is mainly driven by increase in the content we have with new systems, new modules that we particularly sold on electrified vehicles. The strongest outperformance is also for China and Asia, with respectively 6 points and 9.7 points outperformance. And this is mainly thanks to market share gains in the region. North America, 2 points outperformance in that region. You know that we have invested a lot over the last 3 years, 5 new plants built, and the ramp-up of those plants are now -- is now complete. The evolution of our economic sales per region shows a strengthening of Asia in our portfolio from 16% in 2019 to 18% in 2020, with China representing 11% of our 2020 economic sales. Europe stood at 53%, and North America decreased from the 29% in 2019 to 26% in 2020, partially affected in H2 by the weak U.S. dollar to the euro. Per country in details. Germany strengthened its first position in our sales, representing 18% of our total sales, followed by U.S., 13%; Mexico, 12%; and then China, 11%. Per group of customer now. As you can see, the Volkswagen group is clearly our first customer, representing almost 26% of our total sales, followed by Stellantis , 16.6% and with a current limited share at Fiat with 0.9%. If I now classify those customers per market segmentation, premium brands represent around 40% of our sales. And last, but not least, per brand. I remind you that Plastic Omnium sales do not sell any standardized part. We sell specific parts, design parts for each of the model we supply to our customers. It means that our customer exposure is really a brand exposure. So in that aspect, you can see that Daimler is our first brand, with 11% of our sales followed by PSA, 9.6% and Audi 8.9%. So our customer portfolio is diversified and well balanced. Now the P&L and let's go from the sales to the operating margin. What matters here is the right side of a slide, the comparison between H2 2020 with H2 2019, because it really shows the dynamic we are in, in terms of cost evolution and cost structure. First comment, cost of materials and parts sold. As you can see, we almost buy 70% of what we sell. And obviously, the 70% is variable. Out of the 70%, you have only 7% for a whole material purchase, which is 5% of our total sales. We buy a lot of pumps, gauges, lighting systems to deliver complex system to our customers. Then production costs. Production costs at EUR 770 million represented 18.7% of our sales in H2 2020 compared to 19.9% in H2 2019. It really shows that our flex and cost reduction are efficient. And again, also highlighted -- highlights the improvement of our Greer operation. Then the net R&D cost that you see stable at 3% of our sales and this is exactly the same stability at 4.5% for our gross R&D cost. Again, innovation is one of our 3 strategic pillars. And in a challenging environment, we have decided to preserve innovation, spending and investment. SG&A costs were reduced 8.5% and represent 3.1% in H2 2020 compared to the 3.3% we have in H2 2019 and 3.4% for the full year 2019. So all in all, our operating margin in H2 2020 increased EUR 4 million from H2 2019 and representing 5.7% of sales compared to 5.4% in H2 in 2019. Our 2 businesses contributed to that improvement. You can see that PO Industries increased in H2 2019 its operating margin -- increased its operating margin from the 6.5% in H2 2019 to 7% in H2 2020 and PO Modules from the 2.3% to 2.5%. The EBITDA stood at EUR 477 million. This is 11.6% of our total sales. PO Industries contributed EUR 417 million or 14.2%, while PO Modules contributed EUR 60 million and 5.1%. Below the operating margin, we have expenses -- other operating expenses of EUR 334 million in 2020. This amount mainly comprised EUR 52 million of restructuring charges plus EUR 255 million of impairment. In H1, again, we reviewed the value of our assets according to accounting rules in the light of an automotive production slowly recovering in the years to come. In other terms, again, the automotive production with 86 million cars in 2019, we will recover this production level, not before 2023 or 2024. This leads to an impairment adjusted in H2 of EUR 255 million for the year. Financial expenses were reduced by EUR 9 million. They represent 1% of our total sales. This decrease is thanks to the decrease of the net average cost of a debt, which was 3% in 2019 and which is now 2.4%. The income tax is positive, and this is mainly the result of deferred tax effects. And our net result is a loss of EUR 251 million after EUR 255 million impairment. Cash flow statement and cash flow generation, starting with H2 2020. In H2 2020, first, our net operating cash flow is increasing in percentage of sales at 9.3% compared to the 8.8% we had for the full year 2019. We continue to decrease our CapEx in H2. And you see that we almost offset all of WCR outflow we had in H1 in H2. This leads to significant free cash flow generation in H2 2020 with a free cash flow at EUR 606 million. For the full year, this is, therefore, a positive free cash flow of EUR 34 million. Cash management was one of our top priorities in 2020 for sure. In particular, we reduced for the full year our CapEx by EUR 138 million, 27% decrease. And the CapEx we invested in amounted to 5.3% in 2020. This reduction has been made without hampering the growth potential of Plastic Omnium in the years to come and while maintaining investment in innovation as Félicie will explain to you in a few minutes. In 2020, it was also very important for us to respect the commitments we have with all our stakeholders, meaning the supplier base, the employees, the credit investors and the shareholders, you see here a dividend maintained but reduced, 34%. And all in all, our net debt with all those actions stood at EUR 807 million, a level which is quite comparable to the EUR 739 million we had end of 2019. Our financial structure with all of those actions remains very strong with shareholder equity of almost EUR 2 billion. As you can see here, our net debt represent a gearing of 41% end of 2020, 1.2x the EBITDA or 0.8x of EBITDA if we consider H2 EBITDA on an annualized basis. 8.8x, this is the leverage we had in 2018. And I remind you regarding the debt that we have no covenant on it. Our liquidity was reinforced by EUR 200 million, amounts to EUR 2.6 billion at year-end. This is EUR 1.9 billion of undrawn -- EUR 1.9 billion of undrawn credit line we have and EUR 0.7 billion of cash immediately available. In the same time, we also increased the maturity of our debt, which was 3.6 years in 2019 and which is today 4.4 years. We have no major repayment before June 2023 on that debt. So obviously, this strong financial structure and reinforced liquidity gives us the means to implement our long-term strategy. The Board of Directors held yesterday decided to cancel 1.4 million of treasury shares, effective February 25. This operation will reinforce the percentage of control of our holding company, Burelle SA, to 59.35% when the operation is done in a few days. And this Board of Directors also decided to propose to a shareholders' meeting of April 22 to maintain the dividend of EUR 0.49 that we paid out last year. This is obviously a clear sign of confidence in the short and long-term perspective of the company that Laurent Favre and Félicie Burelle will now explain to you in detail.

Thank you very much, Adeline. After 2020, and this very solid performance we are very proud of, it's now time to talk about 2021. What we have achieved in 2020 gives us a lot of confidence for 2021 in our capacity to further accelerate all of our strategic initiatives. We start, first of all, by commenting how we do see the market in 2021 with the slide you can see here. On the left side of the -- on the right -- on the left side, sorry, of the slide, you see the numbers of 2020, Adeline just commented, 71.6 million cars produced with a very different picture in the first semester, impacted strongly by the COVID crisis, 29 million cars produced. And the second semester with a very strong rebound, mainly driven by China and North America, up to 42 million cars. For 2021, IHS is expecting -- is forecasting 81.5 million cars. But as you can see, the balance between the first semester and the second semester is really important to understand, meaning the second -- the first semester is now expected as 39.6 million cars, which is much below the second semester of last year. And therefore, the second semester of 2020 is not representative of the market situation in the first semester of 2021. That is a decrease by 7% to 8%. Our assumption for the market is 5% below the one from IHS because we do see still many effects from the sanitary crisis. As you know, the situation is still in trouble in many countries, especially in Europe. There are some lockdowns still now in many country in Europe, some dealerships being closed, and therefore, that will impact the demand. That will impact as well the speed of the recovery of the market, at least in the first semester. Additionally, there is the well-known chip shortage on the market. We are not directly impacted. We are buying only a few of chips for some of depollution system, but we do see our customers being more and more impacted by the chip shortage. In all the regions, it did start last year in China with FAW Volkswagen. But now most of the customers are impacted in all the regions. We have many factories being partially impacted with some reduction of the production. We do estimate the impact for the first semester at about 1 million cars lost or postponed to the second semester due to the chip shortage. Therefore, our assumption, our way to manage the company for this year is IHS minus 5%. That is our way to manage our cost, to manage our cost structure, knowing that we have the capacity to produce much more if the market should rebound faster than what we do anticipate. We still have a high level of flexibility. You know that we always take care of keeping a high level of flexibility because 20% of our staff are temps. Therefore, we can react very fast if there are additionally a shortage of the production. Based on those numbers, based on those assumptions, IHS minus 5%, we have a strong guidance for 2021, first of all, with a strong growth in sales compared to 2020. We do expect -- we do have the ambition to be back to 2019 levels for the operating margin, and the operating margin for Plastic Omnium was at 6% in 2019. And we do target to generate higher free cash flow than in 2019, meaning higher than EUR 220 million. Again, the market won't be back to the 2019 levels before 2023 or 2024. But we, Plastic Omnium, based on what we have been doing last year, we are confident to be back on similar profitability level already this year. That will -- this year won't be only about financials. As I was saying before, it will be also about accelerating on our group strategies, priorities, meaning on operational excellence, meaning on innovation, meaning on sustainability as well. And that is what we will present to you right now with Félicie Burelle. Starting with how we do see the market developing in the coming years because that is a very important input for all of us in the automotive industry and especially how we do see the powertrain mix developing in the coming years. That is what you can see on this slide. That is based on what we know from our customers, the programs we are concretely working on, but also the regulation, which has been announced by many countries in the world. And therefore, the powertrain mix you see here for 2025, 2030, sorry, is the one we are using to develop our strategy in terms of footprint, but also in terms of product portfolio. I will now hand over to Félicie, and Félicie will comment this slide much more in details and will also explain how we do develop our product portfolio based on this powertrain mix forecast.

Thank you, Laurent. Good day to everybody. So as we mentioned, indeed, 2020 has been a very complex year in many aspects. But one of those particularly was the acceleration of some of the technological trends we've discussed. And one of the main highlights clearly was that despite the fact that we saw the car market decrease by almost 1/5 during the coronavirus pandemic. At the same time, we also saw the global sales of electric cars really accelerating very fast and almost doubling globally. And we believe, in terms of production, that this pace will continue. Acceleration of EVs globally will keep up. And I think with the many recent announcements from some OEMs like [ GLR ] or GM, but also all the state announcements that were made, mainly in Europe, we can clearly believe that this shift is happening. But undoubtedly, there will be some differences by region. So here on this slide, clearly, it's the PO view we have worked out of the mix evolution by 2030 based on customer information, based on our view of the market and how we see it evolve. So this acceleration of electrification is characterized by 3 items. First one, the zero emission electrification. So what we call BEV and FCEV should represent, in our view, 30% of the production by 2030 versus 3% today. And this trend should be driven, we believe, by Europe and China mainly, where those segments will represent 40% of the production by 2030. They will be followed by the rest of Asia, 25%, and finally, North America, that is reacting to different trends with 20% on those 2 segments. Second items is the strong push of hybridization. So we talk here about mild hybrid and PHEVs. Those cars should represent a 35% of the production by 2030 versus 10% today. And last but not least, all in all, we can see that 68% of the automotive production still will be equipped by a tank by 2030, despite this strong acceleration of the electric segment in the years to come. So those are the assumptions we are working on in terms of managing, piloting the business and managing the staffing and the flexing of our plans. We believe we are definitely well positioned to benefit from this trend, but I'll come back a bit later on that. So if we move on to the next slide. Clearly, despite this complex market situation, so acceleration of electrification and strong recovery we have seen in the second quarter, but still, we believe we won't come back to the 2019 level before 2023 or 2024. 2023, it's at best based on some forecasting information, but we believe it will take a bit more. But still in that context, we have capacity available. We have invested strongly over the last decade to follow our customer. So we have the industrial footprint of our 135 plants throughout the world. So we will be in a position to catch up the growth should the market recover faster. In the meantime, we focus on flexing. But also we focus so on moving from a pure market share growth approach to increasing our content per car and we will be in a position to do so by capping our CapEx. But obviously, not putting at risk the investment in innovation. It's just a matter of shifting this allocation of investment. If we move on to the next slide. We talked about Omega. We presented to you a year ago this plan, which is the program we have put in place to put the group in the best position to lead our way through the ongoing transformation of the whole industry. It's totally embedded with the 3 strategic pillars that Laurent Favre have introduced at the beginning of the presentation and really aims at improving our performance by reviewing our processes, being more agile in working, obviously, in using more digital tools, which is a key lever of this program in all the fields of the company, but it's also a lot about organization and breaking silos and to make the most of the growth -- cross-division potential we could have. So far, we have identified 7 streams, 2 are really clearly launched and well advanced. Those ones are the indirect purchasing and the D&D. I'll come back to that. But we are on a daily recurring basis really assessing what could be the other areas of transformation. And clearly, there will be some novelty fueling the pipe for the program for 2021. So on the next slide, quick update on those 2 axes that were launched, mainly on the operational excellence topic. So we aim at achieving EUR 200 million of savings by the end of 2022, half of which will be achieved on an annual basis by the end of 2021 and the second half by the end of 2022. If we look at more details about indirect purchasing. So it's about putting a dedicated team in place that now is operating. It's about making use of the data we have today. And clearly, we're not leveraging enough so it's about putting a tool common for our 3 division and share best practices. And it's about optimizing our supplier panel, reducing the number of those. And here, you have some example of the saving we are now achieving on those specific streams. As far as D&D is concerned, it's about reassessing our processes. Clearly, think about our project team today are working, really, from the beginning of the process, which is the quotation phase, up to the delivery of the program to our plants. So it's quite a long process and here, clearly, there's room for, again, using more of the data that we have, parts data and leverage better the organization in place. On the second pillar, which is innovation. So you have on the next slide, a good representation of what it means at PO to supply solutions for a more connected and greener mobility. So we have a great positioning on BEVs, both with traditional OEMs but also with new pure EV players. So it's great way for us, again, to diversify our customer base and open it to new business model. Moving on to the next slide. We talk a lot about electrification being EVs. But as you know, we have also a strong ambition on hydrogen. We have disclosed to you during our Hydrogen Revolution conference last October, our plan to achieve that as we really believe hydrogen will play a key role in the clean mobility of tomorrow, and we've been investing strongly since 2015 in different breaks to put together this road map. And what we are aiming at is on the hydrogen vessel to get -- to have a market share of 25%, which is comparable to the market share that we have today on our more traditional businesses. But we are also aiming at getting 10% to 15% market share on what is the fuel cell stack and fuel cell system, integrated system. To do so, we've communicated to you also the creation of a JV with ElringKlinger, focusing on the fuel cell stack. So on the next slide, 41, I'll give you a quick update on where we stand today on this transaction. So clearly, this JV with ElringKlinger will put the JV and PO in a position to benefit already from the industrial capacity in place to produce up to 10,000 unit per year. And we have a strong, very strong commercial pipeline with more than 100 projects to come, and we are working hard to making those happening. We are also investing EUR 15 million in buying 100% what is a ElringKlinger today fuel cell system activity based in Austria, and this will complement what we have today already in place with Swiss Hydrogen, which is an acquisition we made some years ago. The project is going well. And actually, I'm pretty happy to be able to tell you that we received just 5 minutes ago the last authorization from the EU Commission. So we should be in a position to close as expected at the end of this month and launch the activity no later than beginning of March. This will definitely be a key milestone in achieving the ambition that you can see on Page 42. Our intention, our ambition is really by 2030 to have EUR 3 billion in sales coming from this activity. This activity will breakeven our target by 2025 and should be accretive to our business by 2030. And for that, we are investing strongly, EUR 100 million each year, to be able to come up with the product that our customers are asking us and the expected that we are putting on the table today and to scale up the industrial capacities needed to do so. Hydrogen, on one side, pure electric on the other side. So all in all, we are well positioned. And you can see on Page 43 that, today, those segments represents 5% of our sales in 2020. And we can see that in 2025, it should represent 17%, so which is a strong acceleration, a strong growth, almost doubling, which is more what we see today in terms of powertrain mix evolution. Innovation is not only about electrification. Innovation is also about connected car. And we've announced to you some months ago, 18 months ago, more or less, the cooperation that we have put in place with Hella, the German supplier, lighting supplier. And clearly, working hard to make -- to come up with this smart face concept, which is how do I integrate connectivity and lighting to our plastic bumpers, but that could be also to other parts. It could be also on tailgates, doors, roof. And we are happy to say that we've been recognized by the CLEPA Association. We have been rewarded in the collaboration category with an award, and we are working hard to be able to propose the solution to our customer. So connected car, part -- some important parts of innovation, but also modules, we are leader today on front-end modules. The PO Modules activity has been very successful in developing new production of modules that we have today on cockpit, active grill shutter, center console and DC/DC converter. So clearly, this contributes really highly to the increase in content per car. And now also PO Modules' HBPO is working on developing proposing new e-modules, specifically addressing the needs of the electric segment of cars. So very strong activity in terms of innovation, as you can see, really addressing all the levers of both electrification and connected cars.

Thank you, Félicie. The third pillar of our strategy, as mentioned today is sustainability as well. Sustainability of Plastic Omnium, that is our program Act for All. That is a program we have been launching some years ago. That is a program which is deploying in all of our factories, in all of our sites since some years, and a program which is based on 3 axes: responsible entrepreneur, care for people, sustainable business. In this field as well, we have accelerated in 2020, and we will furthermore more accelerate again in 2021. We have reinforced our organization. We have seen the 1st of January 2021 an executive committee member fully dedicated to sustainability with high ambition here as well. If we come to concrete initiatives and targets in the 3 axes I was explaining before, starting with responsible entrepreneur. I have commented already what we have been doing with the COVID fund. We are paying a lot of attention on business ethics. It's part of our DNA, basically training most of our employees and almost all of our employees in the coming months to the code of conducts, but also engaging already 1,000 suppliers and pretty soon, 100% of our purchase volume in this journey as well. Regarding care for people, which is the second axis, for sure, the safety working environment, Tf2 at 1.4 last year, which is improving compared to the year before, in very difficult environment, which is improving by 70% since 5 years and where we do target to be below 0.5 in 2025. We had already 70% of our sites being by 0 last year, which is a benchmark performance, basically. The diversity SPO is already present since many years as well. You can see the numbers, what we have achieved in 2020. They are benchmark in the industry we are in. We have 27% of women in our Executive Committee as well. But we believe that it can bring further value further performance to the company, and therefore, we are continuing to accelerate also in terms of diversity. We are paying a lot of attention to young people. We had 800 interns last year in a difficult situation. We want to increase these numbers. It's also our responsibility. And we are deploying these activities all around the world as well. You can see here as well, care for people, it is part of our DNA. And the last topic, which is getting more and more momentum, that is for sure the sustainable business. We have already achieved a lot in the previous years. We have more than 50% of our plants, which are working on our Top Planet program, which is about reducing the need of energy. Our electricity is 1/3 coming from renewable sources already right now. And we are increasing the rate of the recycling of our waste and working more and more on life cycle analysis on bumpers and tailgates. Much more to come. We do envision this year to present to the Board of Directors and then to the market as well, our carbon neutrality road map. We have a strong base for that, but we want to be very precise in what we want to achieve in the actions we are going to deploy, and we are already deploying and with concrete targets as well, and that will be certified by a third party. And we will speed up as well in circular economy with our customers in eco-conception with our customers as well. That is really part now of our innovation road map, meaning the sustainable business. That is now time to conclude our presentation before handing over to you for the Q&A session. As you have seen, 2020 was a very unique year. It was very rich in terms of activities in Plastic Omnium, managing the crisis, but speeding up to prepare the future. We are reinforced in our fundamentals. Therefore, we are very confident by starting this new year. We have a long-term commitment of our majority shareholder. Our 31,000 employees shown last year, again, a very strong engagement in everything we have been doing. Customer portfolio is diversified with newcomers, traditional customers as well. Sustainability is really part of our daily business right now, and we have a very strong financial structure. Therefore, we are confident in our capacity to accelerate our transformation for sustainable mobility. I now hand over to you for the Q&A session.

[Operator Instructions] We have a first question from Thomas Besson from Kepler Cheuvreux.

It's Thomas Besson. I have a few questions. If that's okay, I'll ask them one by one to make it more simple with this complicated process. First, I'd like to get some more details on the organic growth you expect for 2021, please? Basically, I'd like to make sure I understand what you say on Slide 32 about taking 5% off the IHS figures. Does it mean that instead of 14%, you're assuming 9%? Or is it something different? And then what kind of outperformance should we anticipate in '21, given that the geographic mix is going to stay negative as in 2020? Because I think China is expected to continue to grow faster. And a large portion of the Chinese business is not in your consolidated revenue, and I'd be interested by any detail you can give us by region or by segment in terms of organic growth for 2021.

Okay then. I will try to answer those questions. First of all, when we talk about IHS minus 5%, that is not a forecast because it's difficult to forecast the market. That is a management assumption to manage our cost structure. Therefore, we take IHS, we take out 5%. That is the way we are managing our cost structure. If it's more, we are happy; if it's a bit less, we are flexible enough with 20% of our staff being temps to react accordingly. That is the way we are managing the company basically. The outperformance of 2020 you have seen is very strong in the main regions because we had more than 8% in Europe. We had 6% outperformance in China and close to 10% of the rest of Asia. We have the ambition to continue to outperform those markets. What it means in terms of mix, it is impossible to predict today because the market is not predictable. But the clear ambition for Plastic Omnium is to outperform in those main markets in 2021. I don't know, Adeline, if you want to complete the...

Just an additional clarification on the assumption we took for 2021. This is minus 5% of the 81 million cars that IHS forecast for that period. So this is not minus 14 -- this is not 14%, minus 5%.

Okay. If I move to second question, looking at your Slide 35, you have changed quite substantially the assumptions you make in terms of powertrain mix compared with what you had in the past. And clearly, we are all adjusting these assumptions a lot right now because everybody is making new announcements that bring the share of BEV higher. Could you just confirm what you had discussed during the October revolution presentation, with these new assumptions, namely, I think you were discussing the development of 2025, 2030 fuel tank revenues declining broadly from EUR 2.93 billion to around EUR 2 billion, being more than offset by the increase in hydrogen, moving up from EUR 300 million to EUR 3 billion. Are we still happy with that? And does that more rapid decline eventually change in any way your view for your traditional business?

Then basically, we do confirm what we had said in November, meaning that for the fuel, traditional fuel system business, we had a turnover at about EUR 3 billion in 2019 before the crisis, which was, for sure, below this EUR 3 billion last year because of the market development. We do believe we will be able to be at a similar level in 2025, even if the product mix is getting more electrified because we have still opportunities for growth. There are some tanks, which are still in steel, mainly in the hybrid technology, and many customers are now willing to go to plastic. It's for weight and cost reason. Therefore, we have some opportunities to continue to grow, to gain market share in the traditional business and to maintain a similar level of activity, close to EUR 3 billion in 2025. And then it will start to decline. If we consider the assumption of the electrification of the mobility being at 30% for the fuel electric in 2030, we do anticipate our fuel system business being down by EUR 2 billion or being at least at EUR 2 billion turnover, therefore, a decline compared to 2025. And as we have the target for hydrogen to go up to EUR 3 billion in 2030, it will more than offset the decline from the traditional business. Therefore, we do confirm our scenario to maintain the traditional business at a similar level in the coming years until 2025, and then there will be a decline, which will be overcompensated by the hydrogen activities we have.

Very clear. Another question, please, on M&A. I think you discussed the fact that potentially there could be slightly bigger operations eventually coming. I've asked the question myself several times to Mr. Burelle about the potential to eventually acquire part of your Chinese partner's business. I know that it also has always been that it was very nice to be invited to parties and maybe you don't want to crush it completely. But I'd like to know if there is an update on that front, either for China or for basically in terms of strategic interest, what you would look for if you were to do a transaction?

Mr. Burelle was smiling. He could remember your question. No, we have -- I mean, to come back to the market, the market is down in volumes compared to the expectation from 5 years ago. The need for investment is even higher than expected by everybody because of the transformation of the market. Therefore, there will be a consolidation of the market. We do see that with some OEMs right now. And that will be the same for the Tier 1 supplier for the big ones. We are convinced about that. That is the reason why we are very happy to have a strong liquidity, to have the commitment of the main shareholder. And we are exploring all the opportunities which could make sense for us, both in terms of technology, more integration of technology in our products to be more connected and to be more electrified, basically, but also in terms of geography. Therefore, we are assessing the situation, and we will be also very agile to make the best for the company if it makes sense in terms of business.

Okay. It's very clear. A last housekeeping question, please. We have seen both your PPA and your tax rate evolving, let's say, whether I wasn't expecting a date in 2020. Can you give us an indication of what kind of tax rate we should assume and also what kind of PPA level we should get in 2021, please?

Thank you for your question. As far as 2020, it is, of course, a very particular year for tax, which the positive effect is mainly activation of our deferred tax and with some depreciation, as you can see in our financial statement. We expect next year to come back to previous levels. It means a range of 23%, 25% of tax. I'm speaking here at normal condition of operation with no specific new COVID effect. We expect to come back in line and the PPA should be in line with this year's level.

We have a next question from Akshat Kacker from JPMorgan.

Akshat from JPMorgan. Three from my side, please. The first one on the Omega transformation plan and the restructuring actions. Can you remind us how is the implementation of these cost savings going? And how do you expect the P&L benefits? Is it evenly spread between 2021 and 2022? Or is it more weighted towards 2022? That's the first one. The second one is on the Greer plant in the U.S. You mentioned that you expect the plant to breakeven in 2021. Can you tell us where do we stand as of 2020? Have you recovered the $45 million of the ramp-up expenses there? And the final one is on hydrogen. Also, if you could remind us how much of the $300 million same-sales target by 2025 is already covered by orders. And are there any new comments on recent activity in that field, new orders or joint ventures? Or any discussions that you would like to highlight?